Closed loans also exhibited faintly higher DTI ratios, with 24/37 the average, up from 24/36 in 2013.

What Denied Applications Look Like

Wondering what happened to the other 40% of loans? Well, the ones that were flat out denied had an average FICO score of 686, which was lower than the 689 average in May and the 699 average for all of 2013.

So clearly lenders have become a little looser in terms of credit-related underwriting standards.

At the same time, the average LTV ratio of a denied loan was 82%, which is lower than the 84% average seen last year, though that could have more to do with fewer high-LTV HARP refinances being submitted these days.

Despite FHA loans allowing for FICO scores as low as 500, the average FICO for a closed FHA app was 672 last month, whereas a denied loan was just 640.

LTV ratios were pretty similar among closed and denied apps, but DTI ratios were markedly lower on closed FHA loans.

So keeping debt low going into a mortgage app is especially important if your income isn’t too hot.

For conventional loans, the average FICO for a closed loan was 733 in June, compared to a 695 score for denied applications.

High DTI ratios were again an issue on denied apps, whereas LTVs were pretty similar for both those approved and denied.

For the record, applications not reported as denied or closed may still be active, withdrawn, or closed due to incompleteness.